![image of a retired couple drinking coffee on the porch while reading the morning newspaper.](https://i0.wp.com/retirementbenefitsinc.com/wp-content/uploads/2024/04/In-Service-Distribution.jpg?resize=1024%2C451&ssl=1)
In-Service Distributions: A Smart Move for Pre-Retirees
What Is In-Service Distribution?
An in-service distribution allows you to withdraw or roll over funds from your company-sponsored 401(k) plan while you are still employed by the same company. Typically, 401(k) accounts restrict early withdrawals until age 59½. However, an in-service distribution provides a unique opportunity for financial flexibility.
Why Consider an In-Service Distribution?
- Diversification of Assets:
Most 401(k) plans offer limited investment options, often geared toward the average investor and younger employees. By taking an in-service distribution, you gain the freedom to explore a wider range of investment options beyond your current retirement plan. Diversifying your assets across different classes reduces the risk of having all your retirement savings tied up in one basket.
- Seizing Investment Opportunities:
Suppose you believe an investment option outside your 401(k) will yield higher returns than your current plan. An in-service distribution allows you to capitalize on that opportunity. You can strategically allocate funds to potentially enhance your overall portfolio performance.
- Reducing Market Risk:
As retirement approaches, safeguarding your savings becomes crucial. By diversifying and reallocating funds, you mitigate market volatility risks. An in-service distribution lets you adjust your investment strategy based on your changing needs.
Guaranteed Retirement Income with a Fixed Indexed Annuity (FIA)
What Is a Fixed Indexed Annuity?
An FIA is a financial product that combines features of both fixed and variable annuities. It offers growth potential linked to a market index (such as the S&P 500) while providing downside protection. Your principal is protected from market losses, ensuring stability.
Lifetime Income Rider:
An FIA can include a lifetime income rider. This rider guarantees a steady stream of income during retirement, regardless of market fluctuations. You receive regular payments for life, providing peace of mind and financial security.
How It Works:
As you approach retirement, allocate a portion of your 401(k) funds to an FIA. The FIA grows based on the index performance (with a cap), and your principal remains secure. When you retire, activate the lifetime income rider to receive predictable income throughout your retirement years.
Hypothetical Lifetime Income Illustration:
Contract Year | Age | Premium | Annual Withdrawal |
1 | 60 | $200,000 | |
2 | 61 | ||
3 | 62 | ||
4 | 63 | ||
5 | 64 | ||
6 | 65 | $21,802 | |
7 | 66 | $21,802 | |
8 | 67 | $21,802 | |
9 | 68 | $21,802 | |
10 | 69 | $21,802 | |
11 | 70 | $21,802 | |
12 | 71 | $21,802 | |
13 | 72 | $21,802 | |
14 | 73 | $21,802 | |
15 | 74 | $21,802 | |
16 | 75 | $21,802 | |
17 | 76 | $21,802 | |
18 | 77 | $21,802 | |
19 | 78 | $21,802 | |
20 | 79 | $21,802 | |
21 | 80 | $21,802 | |
22 | 81 | $21,802 | |
23 | 82 | $21,802 | |
24 | 83 | $21,802 | |
25 | 84 | $21,802 | |
26 | 85 | $21,802 |
In Summary
- In-service distributions allow you to diversify your investments and seize opportunities.
- Consider allocating part of your 401(k) to an FIA with a lifetime income rider for guaranteed retirement income.
Secure Your Retirement Future with Retirement Benefits Inc!
Are you nearing retirement age? Do not leave your financial well-being to chance. At Retirement Benefits Inc, we specialize in personalized retirement planning that empowers you to take control of your golden years.
In-Service Distributions: What they can do for you.
- Explore the flexibility of in-service distributions from your 401(k) plan.
- Diversify your investments, seize opportunities, and reduce market risk.
- It is time to optimize your retirement strategy!
Discover the Fixed Indexed Annuity Advantage:
- Our experts recommend a Fixed Indexed Annuity (FIA) for stability and growth.
- Enjoy market-linked returns without sacrificing principal security.
- Activate the lifetime income rider for guaranteed income during retirement.
Why Choose Retirement Benefits Inc?
- Tailored solutions for your unique needs.
- Expert guidance every step of the way.
- Secure your financial legacy with confidence.